A Study On The Principle Of Utmost Good Faith In Compulsory Marine Insurance

As one of the most important principles of marine insurance law, theprinciple of utmost good faith aims to protect the insurer who is in theweaker position in controlling risks. This goal is well achieved byfollowing rules of relative duties steming from the principle of utmostgood faith. Under the principle of utmost good faith, the insured isimposed on heavy duties of disclosure and warranty. Once the insured failsto perform such duties, the insured has to suffer severe consequences ofsuch breach that the insurer would be discharged from liabilities under themarine insurance policy. However, the goal of compulsory marineinsurance is to give as much protection as possible to those who suffergreat losses due to marine accidents. Thus, if we apply the traditionalprinciple of utmost good faith into compulsory marine insurance withoutmaking any changes, it’s obvious that it will turn out to be a big conflict. Inorder to avoid such conflict, the traditional principle of utmost good faithmust be changed. However, based on the aforesaid goal to protect theinnoncent third party, the insurer’s comparartively weak position incontrolling risks is all the same. Therefore, it also needs correspondingregimes to protect the insurer’s benefits under compulsory marine insurance.Firstly, it figures out the features of the marine accidents happened inrecently years and analyzes the defects of the existing conventions andregulations related to compulsory marine insurance, then it points out thenecessity of the establishment of compulsory marine insurance and theurgent need to start a new study of changes to the traditional principle ofutmost good faith under such new system. It chooses current marineinsurance systems of powerful marine countries, the United Kindom andthe United States, as study targets. It focuses on the origins, variouschanges and development of the duties of disclosure and warranty from theaspects of scopes, standands and legal consequences for breach thereunder,etc. And through such study, it finds out which rules are opposite to thegoal of compulsory marine insurance. Eventually, the article finds out thedefects of the current marine insurance system in China based on thecomprehensive study on relative regulations and laws. At last, it makessome useful suggestions about the new concept of the principle of utmostgood faith under the new compulsory marine insurance system in China.